mdf commerce inc. (TSX:MDF) analyst has renewed confidence in the company’s prospects with “more room for growth”
Capital Ideas Media | December 4, 2020 | SmallCapPower: Newly-branded mdf commerce inc. (TSX:MDF), formerly known as Mediagrif Interactive Technologies, provides eCommerce software solutions (SaaS) to larger companies (much like what Shopify does for smaller businesses). MDF also enables suppliers to bid on government contracts.
(Originally published on Capital Ideas Media on October 6, 2020)
About 80% of the Company’s sales are recurring SaaS revenues.
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Although mdf commerce was revealed as the new name of the Company on September 24, 2020, the change really began about a year ago with the appointment of Luc Filiatreault as CEO. He divested most of MDF’s non-core, business-to-consumer (B2C) business and instead focused on highly profitable and fast-growing B2B business.
Desjardins Securities analyst Mager Yaghi recently increased his target price on MDF stock to $12 a share, while maintaining a “Buy” rating.
“The main change in philosophy is that the company is now focusing less on identifying cost-saving opportunities and opting instead to invest in improving revenue growth,” the analyst wrote, adding that he has renewed confidence in the Company’s prospects, especially in the rapidly-growing fields of eCommerce and supply-chain digitization.
COVID-19 has boosted MDF’s growth prospects, as its customers have accelerated their adoption of the Company’s product offerings.
For example, Mr. Yaghi points not only to MDF’s Unified Commerce segment (contributing 40% of its sales), which has benefitted from its client companies’ rush to generate online revenue, but he also sees big growth ahead for its e-procurement and e-tendering platforms, the main focus of the Company’s soon-to-be active M&A strategy.
“MDF’s stock has performed well recently but we believe there is more room for growth based on the much higher valuations of comparable companies,” the Desjardins Securities analyst said.
mdf commerce’s recently-reported financial results (Q1 2021) showed revenue of $20.5 million, up 8.4% sequentially, while its core Unified Commerce platform generated year-over-year revenue growth of 48%.
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